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Kevin Bullis

A View from Kevin Bullis

Study: Exporting Natural Gas Will Help the Economy

But if the Obama administration approves exports, it might hurt manufacturing and chemical production in the U.S.

  • December 6, 2012

The U.S. Department of Energy released a long awaited report that estimates the economic impact of allowing natural gas exports. It concluded that while exporting natural gas could marginally increase electricity prices and lead to lower wages, in total the economic benefit of selling natural gas to other countries would outweigh these problems.

Still, some are concerned that exporting natural gas, since it could lead to an increase in natural gas prices in the United States, might hurt companies that have been counting on low natural gas prices. Dow, for example, is investing heavily in chemical plants in the U.S. that will use natural gas as a feedstock.  From the Wall Street  Journal:

Dow is one of the largest consumers of U.S. natural gas and is investing heavily to build new processing facilities on the Gulf Coast. Dow executives say that natural gas brings much bigger benefits as a feedstock for the manufacturing and petrochemical industries than as an export … 

Dow Chemical Vice President George Biltz said Wednesday the study failed to account for U.S. manufacturers’ growing use of natural gas. “That’s just not an honest assessment,” he said.

Beyond chemical production, natural gas prices could affect the deployment of renewable energy. Low gas prices have led to lower electricity prices, making it harder for wind and solar to compete, even with subsidies (see “King Natural Gas”). 

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